- Personal Finance»
- Understanding Finance
25 Stupid Mistakes in Stock Market
Book : 25 Stupid mistakes you don't want to make in the Stock Market by David E. Rye
"To tell you the truth, I'm more concerned about the return of my money than the return on my money" - Will Rogers when asked about what he thought of the market's returns.
Quoting the above, in the preface, David Rye mentions the goal of this book as 'to show how to avoid, contorl and minimize risks so as to enjoy high returns from the market'. This book fulfilled this task very effectively and inaddition provides much more to the reader.
As the title says, the book lists twenty five mistakes to avoid, each mistake is explained in each chapter. So you have exactly twenty five chapters in this book.
Each chapter just does not end with writing about a mistake but contains lots of related information and very educative. Every chapter ends with a section 'The least you need to know' - it is the take away from the chapter.
Common mistakes in stock market
Let us look at some of the mistakes:
Mistake No 4: I don't analyze the stocks I buy. Ofcourse the author explains why we need to independently and thoroughly analyze every stock we invest in but also educates on how to analyze a stock, how to understand the fundamentals, how to understand the annual reports and financial newsletters etc.
Mistake No 9: I don't understand or follow Economic Indicators. In this chapter, the David Rye explains how the stock prices change as a result of demand and supply, how to understand inflation with respect to the market, how the interest rates affect the economy and markets and much more. Every chapter has wealth of information and by the time you complete this book, you are bound to gain good understanding about economy and stock markets.
Mistake No 13: I don't read Stock Charts. Not just pointing the mistake, this chapter explains in detail where to get the charts, the key parts of a stock chart, how to read a stock chart, how to analyze corporate reports, how to recognize signals, how to spot winners etc.
As you can see this book is not just a list of mistakes to avoid but also an explanation of the right things to do while investing in the market apart from providing a comprehensive education on stock investing.
Though this book takes examples from American stock market, the concepts and education in the book are equally applicable to any other stock market.
The quotes mentioned at the beginning of each chapter are very relevant, entertaining and highly thought provoking.